“Ethnocentric managers” are home country oriented and apply the organization’s domestic policies and practices to its overseas units. Decision making is centralized and the headquarters based in the home country provide direction for the entire organization regardless of the geographical location. Even though, it is simple in application, it is not workable in all types of environments. For example, in America, if a company is not doing well, its president can easily be removed and changed. In Japan, such a move would disturb the trust in the company, for the Japanese believe in doing their best and would not easily believe that the fault lay with the Japanese president.
“Polycentric managers” are host country oriented and believe in decentralized decision making for international units. Headquarters provides only general overall guidance. This is very useful because such managers are more familiar with the local work environment including local cultures, as well as methods, procedures and training programmes required for successful operations.
“The main advantages are an intensive exploitation of local markets, better sales since local management is often better informed, more local initiative for new products, more host government support and good local managers with high morale”. “Geocentric managers” are truly global managers. They are world- oriented and are trained to balance the local, central and global objectives. Collaboration between the local offices and the head office is high and the communication flow between the subsidiaries and the parent company as well as among the subsidiaries themselves is free and open.
A geocentric executive may obtain raw material from one country, produce component parts in another country and arrange the final assembly in yet another nation and sell the product wherever needed. An international manager must mould himself so as to behave like a guest in the host country. He must be familiar with the religious beliefs and practices in the host country. For example, everything stops on Saturdays in Israel.
Moslems in Middle East would not work on Friday afternoons. People are highly sensitive about their religious beliefs and these beliefs must not be disrespected. Equally important for the international manager is the knowledge of local language. This knowledge would help them to communicate effectively with subordinates as well as other workers and would improve their visibility in the community. Even though competent interpreters and translator’s one available, they are poor substitutes for the knowledge of the language.
Additionally, an international manager must be sensitive to local needs and desires and be flexible to accommodate any differences so that his leadership style and practices fit the unique demands of the local cultures and situations.